Pricing with Confidence, 2nd Edition

CHAPTER 8Rule Eight

Build Your Give-Gets Muscle

Commercial teams successful in implementing effective price strategy exercise a powerful discipline or muscle that they can deploy on a regular basis. We call it Give-Gets, otherwise known as trade-offs. By whatever term, it means agreeing to a reduction in price coupled with a corresponding reduction in value to the customer. A fence prevents customers from getting access to features and services when they haven't paid for them. Product managers can protect value with the right fences. Customers give less so they get less. Give-Gets are the antidote to the traditional propensity to discount.

Using the Offering Structure to Win at the Negotiating Table

We have found that discounting is the greatest source of price leakage today. Customers feeling the weight of price increases during this inflationary time may push even harder for deeper discounts. While discounting is a cultural habit by many companies, it is only worse now. To stop the bleeding, the first action is commitment by all leaders within the company to stand behind the price. Give-Gets provide the fuel to maintain price value alignment. With rampant inflation, it is important to give customers choices instead of a straight up price increase. Offering choices will give your customer a stronger feeling of your partnership and care for their business.

In our business, clients often request a discount, and we usually agree. We are not against negotiating. But here's ...